IPHONE - All posts tagged IPHONE

My favorite question from the interview was indeed probably that one about how the future of tech isn’t necessarily sum-zero, meaning that it’s not only going to be Apple that wins. Google, Microsoft will be there too and their suppliers like Sandisk, Fusion-IO and others that I’ve cited here are likely to continue secular growth from here too.

So guys, the point is that Apple is up huge again today. And it’s up huge since we bought it. And it’ s up huge since we wrote any of the above articles. And it’s up huge since I wrote these words back just a few quarters ago.

I think Google and Apple are both moving to try to dominate the future TV “platforms” in the same way that they dominate the smartphone platform world of today. That’ll be huge business if they succeed. HUGE. Which means that in three years or so that Ballmer will finally decide that Microsoft might need to try to figure out a TV platform strategy of their own. Idiot. We own a small MSFT position despite Ballmer, who, as I’ve been saying for years, needs to go. Marvell would benefit from Google TV success as long the box makers are buying the Marvell components to make it run, but that’s a long way from having any clear impact on Marvell’s business. GOOG = buy. MRVL = hold.

I first bought Apple in public for my hedge fund back in April 2003, when it was at $7 a share. And if you’d like to see a few tech stocks that I think could become the next Apple, be sure to sign up for Marketwatch Revolution Investing to get my latest report “10 Tech Stocks for 2012″ free with your subscription. A few weeks ago, I got even longer Apple when the stock was down near $360 or so, as I’d shorted some Apple puts.

60% premium? That’s what Google paid over what Motorola was trading at on Friday. Motorola’s been killed this year, but has a good balance sheet and is obviously a historic company that wasn’t going to go out cheaply. Google had to pay up and they did and it looks like the markets saying that “it’s winners all around”.

How many markets can you name that will double and triple in size in the next three to four years? Parks Associates says that by the end of 2010, we will have downloaded 4.6 billion mobile apps. By 2014, Parks projects, the number will reach 11 billion. 100 million smartphones sold last year, much more than 250 million smartphones will be sold next year, and more than a billion smartphones will be sold annually within ten years.

Apps will grow secularly, regardless of what happens to the broader economic cycle. That is, they’re in secular growth mode not just cyclical growth mode. And that means the worst case scenario for apps is still a better bet than anything else you can invest in on the long side in this economy.

Well, it’s the holiday season and fortunes will be won and lost for investors as the consumer and the consumer’s lovers/friends/parents/colleagues decide how much to spend and on what this year. iPads and iPhones and Androids are on a lot of people’s shopping lists this year. Google TV? Not so much, it seems.

Then again, maybe instead of freaking out, everybody should catch their breath. Go take a walk around the block with your dog. Go check out the latest Android tablet auction from my site, AppConsumer, and see if you can get a new iPad for less than $50 like somebody did last week. Go to a movie. Go ride a horse. Do something besides freak out about your stocks and whether Apple is going to rally between now and year end or not.

The stock’s cheap, with an enterprise value now at less than 15-times next year’s earnings, when you include the $24 billion plus in cash they have on their balance sheet — nearly $75 per share. That’ll be closer to $200 billion or so in cash by 2020 and if the company grows earnings at just 15% per year for the next seven years, they’ll be earning $90 a share. Throw a 20 multiple on that and add the $200 cash and guess where you end up? That’s right, $2000 per share price target for Google.

About The Cody Word

Cody Willard writes the Revolution Investing investment newsletter for MarketWatch and posts the trades from his personal account at TradingWithCody.com He is the founder of WallStreetAll-Stars.com and the principal of CL Willard Capital. Cody serves as an adjunct professor at Seton Hall University and is on the University of New Mexico Alumni Board. He was an anchor on the Fox Business Network, where he was the co-host of the long-time #1-rated show on the network, Fox Business Happy Hour. Cody, a former hedge fund manager, and his stock picks and economic outlooks have been featured on NBC’s The Tonight Show with Jay Leno, ABC’s 20/20, CBS Evening News, CNBC’s SquawkBox, Jon Stewart’s The Daily Show, as well as in the Financial Times, Wall Street Journal, New York Times, and many other outlets.